The failure of CAP reform: a public choice analysis1

This paper uses public choice theories to explain why agricultural subsidies were centralised and why this hinders reform. It shows that the Commission is not responsible for the expansion of the CAP by arguing that budget‐maximising behaviour is irrational in the circumstances and that bureau shaping explains its stance on reform. The input process and the success of agricultural groups vis‐à‐vis consumer and taxpayer groups is explained using both the pluralist and Olsonian account of interest group politics. The conclusion analyses the latest difficulties in achieving reform at Berlin and the prospects for reform.     

Understanding the Behavior and Hedging of Segregated Funds Offering the Reset Feature

Abstract

Segregated funds have become an extremely popular Canadian investment vehicle. These instruments provide long-term maturity guarantees and often include complex option features. One controversial aspect is the reset feature, which provides the ability to lock in market gains. Recently, regulators have announced that firms offering these products will be subject to new capital requirements. This paper discusses the effects of volatility, interest rates, investor optimality, and product design on the cost of providing a segregated fund guarantee. For each scenario, the authors provide the appropriate management expense ratio (MER) that should be charged and demonstrate the current liability using a given fixed MER. The paper also investigates intuitive reasons that cause the reset feature to require such a dramatic increase in the hedging costs. Finally, an approximate method for handling the reset feature is presented that can be computed very efficiently, provided the correct proportional fee is charged.     

The reconciliation of humanism and positivism in the practice of consumer research: A view from the trenches

Consumer researchers commonly assert that humanism differs from positivism (what is referred to here as naturalism) on a number of dimensions. However, it is shown here that once terminological differences and methodological similarities are recognized, the remaining differences between humanism and naturalism within consumer research are few. While arguments persist at the philosophical extremes, it appears that practicing researchers have achieved considerable reconciliation.     

Beating,ditching and hiding: consumers’ everyday resistance to marketing

ABSTRACT

This article illuminates consumers’ views of marketing in light of theories of resistance. It argues that consumers engage in resistance to the power of marketing through their everyday actions and also through the ways they construct their accounts of these actions. It identifies three theoretical approaches to resistance (hegemonic, relational and autonomous). These are used to discuss consumers’ accounts of marketing collected through 78 personal interviews in which participants were asked to describe marketing and provide examples of their experiences with marketing as they defined it. Through this, the study uncovers various forms of consumer resistance, which can often go unnoticed. These are conceptualised through the notion of everyday resistance to marketing and are used to challenge existing marketing theory and develop paths for future research.     

The interactive effects of monetary incentive justification and questionnaire length on mail survey response rates

An experiment was conducted in which a survey questionnaire and a $1.00 incentive were sent to 200 randomly selected residents of a midwestern city. For half of the respondents, the enclosed monetary incentive was justified in a cover letter as an attempt to induce feelings of obligation to return the questionnaire (equity-salient condition), whereas for the other half of the respondents, the incentive was justified as an appreciative gesture (standard condition). Furthermore, some subjects received a short questionnaire, whereas the rest received a long questionnaire. Response rates were assessed by condition. As predicted, the equity-salient appeal produced a significantly higher response rate than the standard appeal, but only for subjects who received the short questionnaire. Results are discussed in terms of personal equity theory. © 1994 John Wiley & Sons, Inc.     

Cause marketing and customer profitability

This research marks the first attempt to investigate the cause marketing–customer profitability relationship, and to assess whether features can moderate the influence of cause marketing (CM) on customer profitability for a focal brand and its main rival. We obtain a panel dataset on 7257 customers to evaluate the Yoplait–Susan G. Komen partnership. On a propensity score matched sample, we estimate a multilevel model and find that Yoplait’s CM initiative positively influences Yoplait’s customer profitability (2.70%), along with a deleterious effect on Dannon’s customer profitability (?13.31%). These findings are theoretically meaningful and pragmatically useful as they: (1) provide behavioral evidence of CM’s profit impact, (2) establish CM as an “offensive” strategy that cultivates the rival’s customers, (3) suggest features can amplify the effect of CM on the focal brand’s customer profitability, and (4) support that managers can add CM to their strategic marketing arsenal as an instrument to strengthen brand equity.     

Where Grass Has No Roots: The Concept of ‘Shared Strategic Communication’ as an Answer to Unethical Astroturf Lobbying

As researchers pursue connections between strategic communication and management, they need to critique practices to develop norms that increase strategic communication’s long-term contribution to society. Norms of strategic communication are shaped by socially constructed standards of corporate social responsibility (CSR) and guide how strategic communication fosters organization-public relationships (OPR). Such norms are particularly important regarding deliberative strategic communication, which uses political CSR to guide corporations’ political role. Although principles of OPR and political CSR should foster more ethical strategic communication, some practices weaken such standards. To make that case, this article (1) reviews the historical foundations of deliberative discourse, (2) examines principles of OPR and political CSR, and (3) applies normative principles of deliberative discourse (4) to critique three cases of strategic political communication, known as astroturf lobbying, a deceptive lobbying practice that undermines and fakes grassroots movements. We conclude by integrating the findings into theory building that shifts CSR outcomes from advantaging individual organizations adding value to society. This theme uses ‘creating shared value’ to advocate shared strategic communication. This notion includes the normative claims of political CSR (open discourse, participation, transparency, accountability) to arrive at shared strategic communication that supports the ‘good’ organization and society simultaneously.     

Local volatility function models under a benchmark approach

Without requiring the existence of an equivalent risk-neutral probability measure this paper studies a class of one-factor local volatility function models for stock indices under a benchmark approach. It is assumed that the dynamics for a large diversified index approximates that of the growth optimal portfolio. Fair prices for derivatives when expressed in units of the index are martingales under the real-world probability measure. Different to the classical approach that derives risk-neutral probabilities the paper obtains the transition density for the index with respect to the real-world probability measure. Furthermore, the Dupire formula for the underlying local volatility function is recovered without assuming the existence of an equivalent risk-neutral probability measure. A modification of the constant elasticity of variance model and a version of the minimal market model are discussed as specific examples together with a smoothed local volatility function model that fits a snapshot of S&P500 index options data.     

Reconceptualizing the effects of lean on production costs with evidence from the F-22 program

A central tenet in the theory of lean production is that the implementation of lean practices will reduce waste and thereby decrease costs. However, not all lean implementations have produced such results. Apparently, this effect is moderated by several factors, potentially even to the point of reversal. It is important to increase our understanding of how this might occur. In this paper, we explore how novelty, complexity, instability, and buffering affect the relationship between lean implementation and production costs. An interest in these factors drew us to study the case of Lockheed Martin's production system for the F-22, an extremely complex and innovative product. To build theory, we synthesize our empirical data from the case with other existing theory, such as theories of learning and complexity. Through this analysis, we develop a revised framework that reconceptualizes the effect of lean on production costs and use it to develop 11 propositions to direct further research. Included among these are propositions about how the timing, scale, and extent of lean implementation can regulate the benefits of lean. Furthermore, when the objective of lean is construed as the provision of value, we propose that this value is an emergent property of a complex process, different from the mere sum of the values provided by its constituent tasks. Therefore, the elimination of tasks will not guarantee cost reduction, and lean may provide even greater value by incorporating some aspects of agile manufacturing. Overall, we develop a fuller range of the effects of lean practices on production costs and illuminate how operations managers might control key variables to draw greater benefits from lean implementation.